Dublin business owner says Government's Budget for 2019 is not helping crippled retailers struggling to compete

09/10/2018 Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, TD at the announcement of Budget 2019 in the Courtyard of the Department of the Taoiseach,Government Buildings, Dublin (Image: Gareth Chaney Collins)

The Government are crippling struggling retailers who cannot compete, a north Dublin business owner has claimed.

Duggan's Jewellers shop owner Damian Duggan said more and more retailers were struggling to compete because of the Government's "penal" VAT rate of 23% and the Government had not introduced anything in the budget to help them.

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Mr Duggan said: "Give us a level playing pitch, give us a level where we can compete. We're being crippled."

For the self-employed the earned income credit is set to be increased by €200 to €1,350 next year, but still does not bring it into line with Paye workers' income credit.

The minister also announced targeted changes to the Keep scheme to help small and medium sized businesses attract and retain key staff.

A special VAT rate for the hospital sector was also scrapped.

The hospitality sector has been highly critical of the budget because Mr Donohoe announced its 9% VAT rate would be upped to 13.5% next year.

But Mr Duggan said he and other small businesses would only be too happy to pay that rate as they were paying 23% VAT.

(Image: Thomas Trutschel/Photothek via Getty Images)

Retailers, such as book shops, newsagents and jewellers, are liable to pay VAT at 23%.

The jeweller, who is secretary treasury of the Association of Fine Jewellers said: "There are an awful lot of businesses that are on the verge or they have closed in the last few years because of very penal VAT rates."

Mr Duggan said the VAT rate had been increased from 21% to 23% as a temperary measure eight years ago, but there was no sign of it being reverted any time soon.

The retailer, who has been in business in Dublin's Fairview for 38 years, said he reckoned that most people who were "in any way savvy" travelled across the border to shop and benefit from a lower VAT rate of 20% and weak sterling.

He said: "We cannot compete with that, we will try our damnedest, we bend over backwards to please our customers but how can we compete."

He said the Government was failing to collect any online revenue from any companies.

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Marc O'Dwyer, chief executive of cloud accounting software firm Big Red Cloud, said he believed the Government had missed an opportunity to help small businesses.

The Dublin-based company has 25 employees in Ireland and five in Vietnam.

Mr O'Dwyer said: "There are about 200,000 small businesses in Ireland and about 3,500 businesses are set up on a monthly basis and there don't seem to be any grants or tax reliefs for existing business owners to reinvent their businesses, who are on a daily basis employing staff, paying employers PRSI and paying money to the Irish revenue."

He added: "There's no real incentive to get people out of normal employment to give them a kick-start to be an entrepreneur and keep reinvesting in business.

"The Government has missed a trick. They should be supporting them much more so."